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Boehner’s Blunder

They hadn’t even finished counting the ballots in Florida
when House speaker John Boehner indicated that Republicans were
preparing to surrender on issues ranging from taxes to health-care
reform.

With regard to taxes, Boehner signaled that he was once again
open to a “grand bargain” to avoid the looming fiscal
cliff. While he kept an increase in tax rates off the table for
now, Boehner said that he was open to “additional
revenue” as part of a deal. Such additional revenue could, of
course, take many forms, such as closing loopholes, raising fees,
or counting on increased economic growth. But by preemptively
conceding on revenue, Speaker Boehner takes the focus off the need
to cut spending.

Giving in on key
Republican principles such as taxes is no way to rebuild the
party.

Speaker Boehner correctly noted that everyone agrees we
can’t keep spending more than we take in. But that implies
that the problem is simply the difference between what comes in and
what goes out. It’s not.

The Congressional Budget Office projects that, under current
policy, federal spending will reach 46 percent of GDP by
mid-century — even if we never add another new government
program. True, a substantial portion of that spending will be
interest on the federal debt. Theoretically, therefore, if taxes
were increased enough to cover spending and close the deficit,
adding no additional debt, we’d have far lower interest
payments, meaning that total levels of government spending would be
lower in the future. Lower, but not that low: Even if one assumes
that the government accumulated no additional debt beyond the $16.2
trillion it currently owes, federal government spending would still
approach 30 percent of GDP by 2050. Throw in state and local
spending, and government at all levels would consume roughly half
of everything produced in this country. We might have no deficit,
but we would have both higher government spending and a bigger tax
burden than Greece has today.

Boehner’s willingness to give in so easily on revenues
makes it less likely that there will be real spending cuts as part
of any deal. We’re likely to get more of the sort of
smoke-and-mirrors measures that the president has already proposed,
such as reliance on phantom savings from ending the wars in Iraq
and Afghanistan, double-counting cuts that were already included in
last year’s budget agreement, and the perennial promises to
eliminate “fraud, waste, and abuse.” Just look at how
illusory the alleged spending cuts in last year’s
debt-ceiling deal turned out to be: In the twelve months following
that deal, federal spending actually increased by 3.6 percent, an
average of $11 billion more every month.

At a minimum, Speaker Boehner seems to have given up any
leverage that he might have had to demand the entitlement reforms
necessary for any long-term spending restraint. Having conceded on
taxes, what does he have left to trade?

For that matter, even his line in the sand about tax rates seems
unlikely to hold. Having already surrendered to the idea of tax
hikes, the debate becomes one not about whether to raise taxes but
about which taxes or whose taxes to increase.

Similarly, the speaker sent conflicting signals on whether or
not Republicans will continue to pursue repeal of Obamacare.
Boehner first told Diane Sawyer that “Obamacare is the law of
the land,” and that Republicans will no longer devote
political capital to repealing it, while maintaining that there
“may be parts of it that we believe need to be
changed.” Later he walked those comments back in a tweet,
saying that full repeal remained a Republican goal.

If nothing else, Boehner’s health-care remarks muddy the
party’s position on a crucial issue.

It is not as though Obamacare has become significantly more
popular. Exit polls showed that even an electorate that reelected
President Obama opposed the new health-care law by 49 to 44
percent. And many of the law’s most damaging and unpopular
provisions have not even kicked in yet. Next year, for instance,
will see the implementation of many of its new taxes, including the
medical-device tax, a Medicare payroll-tax hike for those making
over $200,000, and a new surtax on investment income for the same
group. And, of course, in 2014, just in time for the midterm
elections, Americans will be hit by the law’s individual and
employer mandates.

Obviously, with the Democrats in control of the Senate and
President Obama reelected, Obamacare was not going to be repealed
this year. But that doesn’t mean that Republicans should stop
fighting it. House Republicans still have the power of the purse,
and state governments have been entrusted with the law’s
implementation. At least ten states have refused to set up the
insurance exchanges that the law stipulates. (Governors Bob
McDonell of Virginia and Sam Brownback of Kansas are the latest to
announce that their states will not do so.) At least another eight
states simply will not be able to set one up before the law’s
deadline of January 1, 2014. That means that the Obama
administration will have to seek additional funding in order to
operate federal exchanges in those states. House Republicans should
refuse to appropriate any such funds and should block attempts by
HHS to shift funds appropriated for other purposes.

But can Americans count on House Republicans to hold the line in
the wake of Boehner’s comments?

Republicans certainly took a drubbing in this year’s
elections. Rethinking and repositioning may well be necessary,
especially on immigration and social-issues messaging. But let us
not forget that Republicans are only two years removed from a
historic landslide victory won in part by opposition to government
spending, taxes, and Obamacare. And, despite the Democrats’
best attempts to paint House Republicans as plutocrat-loving,
grandma-hating obstructionists, the GOP caucus lost a net of only
four seats. Indeed, the Tea Party Caucus, for all the criticism it
received, lost only three seats.

John Boehner knows that the Republican brand could use some
refurbishment, but surrendering on taxes, spending, and health care
is hardly an auspicious way to begin the task.